These companies let their customers know what they sell via transparent pricing

Transparent pricing has been gaining hold among a select group of retailers, who say that it appeals in particular to millennialsNYT News Service | Updated: June 09, 2017, 10:55 IST

To make its Kennedy Weekender overnight bag, the accessories and leather goods company Oliver Cabell spends $16.02 on canvas, $11.58 on leather, $5.68 on lining and 78 cents on webbing. The zipper costs the manufacturer $4.27.

In total -including manufacturing, transit, duties and other expenses -the company spends $110.35 to create the bag, which it sells online for $285.

And while most retailers keep such details opaque so consumers won't know how big a markup they are charging, Oliver Cabell flaunts the cost breakdown of all its products on its website, so customers can see exactly what they are paying for and how much the manufacturer is charging them on top of its cost of production.

This practice, known as transparent pricing, has been gaining hold among a select group of retailers, who say that it appeals in particular to millennials - who often want to know not only the provenance of the goods they are buying, but also what, exactly , they are paying for.

“Price transparency is crucial for clients who want to be sure that everyone was paid a fair wage along the way ,“ said Bruno Pieters, founder of Honest By, a Belgium-based clothing and accessories retailer.

Employing the slogan “the world's first 100% transparent company ,“ it uses a price breakdown so extensive that it includes the cost of size labels and hang tags. Pieters explained by email that his decision to present his products this way stemmed from his time at a major fashion house.

“I saw how the companies I worked for and others would move their production from Belgium or France to Vietnam or India, but would still be asking the same prices they asked before,“ he said. Other ethical concerns, like fair wages, also informed his decision.

Scott Gabrielson, who got the idea for his accessories and leather goods company, Oliver Cabell, while working on his MBA at Oxford, said the ability to sell directly to consumers online had a big influence on his decision to use transparency pricing.“By cutting out traditional wholesale, you can sell directly to consumers and have a much higher quality product for a much lower price point -the pure economics make that work,“ Gabrielson said.

One of his biggest challenges, however, has been convincing shoppers that the goods he sell are worth the cost, particularly when all that people have to go on are the pictures on his website.

Such skepticism may be on the wane, however, as consumers migrate online from malls and brick-and-mortar retail stores. Natalie Grillon, founder of Project JUST, which collects ethics and sustainability data on fashion brands, said she thought transparency pricing would give a leg up to retailers that used it.

“We've lost understanding the value of clothes we buy ,“ Grillon said. “Pricing transparency and stories behind the scenes help the shopper navigate the decision to pay for a more expensive product."